Seoul, Tokyo headed for WTO legal battle over trade dispute

2019.11.21 13:36:30 | 2019.11.21 15:11:30

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South Korea and Japan are set to enter lengthy legal battle over Tokyo’s export curbs in response to Korean court rulings on wartime forced labor as they have failed to settle their differences in the two rounds of meetings under the mediation process of the World Trade Organization (WTO).

Chung Hae-kwan, Korea’s chief negotiator in a press briefing after the second round of trade talks held in Geneva on Tuesday (local time) indicated the two would now have to meet at the WTO dispute panel as two could not reach an out-of-court settlement.

Chung said Seoul maintained that Tokyo should first withdraw unfair export restrictions against Korea. Tokyo denied any political influence and argued its action had been a part of revision in export control policy.

In July, Tokyo tightened export restrictions against Korea on three high-tech materials - hydrogen fluoride, fluorinated polyimide, and photoresist- used in making memory chips and displays, citing national security issues. It accused Korea of not properly controlling the materials, implying that Seoul’s loose management has allowed the materials to be smuggled into North Korea and to be used in making weapons there without proof.

But Seoul finds the move retaliation against Korean court rulings ordering Japanese companies to compensate Korean victims of Japan’s forced labor during World War II. Since then, only about 10 exports of the materials have been made. Tokyo recently approved shipment of liquid hydrogen fluoride to Korea for the first time after it launched the export restriction.

A WTO dispute process usually takes three years.

Once the WTO establishes a dispute settlement panel, the panels review the case for up to nine months and produce a report or ruling. The panel process itself generally takes one to two years, and the dispute settlement could last nearly three years if the case goes to appellate body.

The breakdown in bilateral diplomacy to settle trade dispute coupled with the Nov. 23 termination of symbolically-important military intelligence-sharing pact dubbed Gsomia indicates relations between Korea and Japan at their worst since normalization of diplomatic ties won’t thaw any time soon.

By Lim Sung-hyun, Oh Chan-jong, and Cho Jeehyun

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